5/14/2007

Planning for retirement

Over the last few weeks we have heard warning voices of how Singaporeans are going to cope in their old age. There were concerns that Singaporeans are not planning for their retirement. It is all a big irony, an unbelievable irony!
Singaporeans not planning for their retirement? Or do they need to? When we are talking about planning for retirement, what we are saying is saving that pot of gold so that we can live gracefully without becoming a burden to anyone. And the insurance agents will throw all the policies to you and say these are what you need. The painful thing is that after 20 or 30 years down the line they will tell you that you are not adequately covered. Not enough, after paying all the premiums!
What about CPF? Singaporeans have the highest saving rate in Asia other than Japan. Probably the second highest in the world. We are saving at least 30% of our income. And again not enough. How I wish I have a million dollar income. Then I will also complain not enough.
How many Singaporeans can afford to save some more when they are already saving more than 30% of their monthly income and struggling to make ends meet? How many have the luxury of earning a million a year and still complain not enough? The majority of Singaporeans will never save enough for their retirement if the cost of living is to run up continuously, and at an alarming rate. The only way out is to work till they die.
And is there a need for Singaporeans to plan for their retirement when the govt is planning for them by withholding their life long savings in the CPF to be released in drips at their old age? There is no need for the lower income Singaporeans to plan for their retirement. They cannot afford to. They just need to work and work and work.
The state has assumed the role of planning for the Singaporeans' retirement. How can anyone expect the Singaporeans to plan and save when they are already squeezed to save in the CPF and have nothing left to save?
Do we really expect ordinary hand to mouth Singaporeans to save in the CPF, buy insurance policies and save some more in their personal savings accounts? Only million dollar Singaporeans can do that.

37 comments:

Anonymous
said...

Hi Redbean, you are talking nonsense again!! I have just read the ST today and they are saying that there is so much money in the pockets of Singaporeans these days that they are splashing out on $80 - $175 bunch. So how can you say Singaporeans are poor and cannot save for retirement? The F&B outlets, hotels and other fine dining eateries are doing a roaring trade. I say, you are not in touch with the real world. Singaporeans are rolling in money right now. The property market is up, salaries are up ( by $1m or thereabout ), SXI is up, everything is up and the future is rosy. So please Redbean, please do not throw doom and gloom around without getting your facts straight.

I think some people are just living in fool's paradise, ie spend while you can and the future can take care of itself. Is that so? With this mindset, a lot of people will definitely be in trouble when they wake up, but it is always too late to regret.

People should realise that you cannot have your cake and eat it, ie spend all your money and still hope to have enough for retirement.

"Do we really expect ordinary hand to mouth Singaporeans to save in the CPF, buy insurance policies and save some more in their personal savings accounts? Only million dollar Singaporeans can do that."

What hand to mouth nonsense?

Come on redbean, I see so many Singaporeans earning 6 or 7 figures, "we have done well..." Just look at our tremendous resources- coughing out 10 millions to fund F1, is small problem.. we are so rich we could even give free handouts to our neighbours - scholarships and bursaries no strings attached, what are friends for? Point is, this is a successful place overflowing with milk and honey, and we are damn ok; if not, we would have uncles sam's mountain of gold behind us to see us through.

Those luckless burgers you kept portraying, must in your mind that's all.

And for the people out there, who think we are well, please think again, as there is people who cannot even afford to go online for this discussion. And it's making up a bigger share of the population.

If there are gloom like you said in the "bigger share of the population", how come it is not shown up in the statistics. Instead demand for coe and properties are surging, employment rate is rising etc.. I am puzzled by what you said.

i know many people who are earning millions and worth several milions. i also know many people are earning $1k or $2k a month. like one of the new mps said, 'huh, i never know that there are poor people in singapore.'

but i actually have to agree with you. all the poor people in singapore are fictional. and lily neo was fighting to raise their monthly assistance from $260 to $400. she must be fighting for non existence people or aliens.

and all those hundreds and thousands of charity organisations must be collecting money for fictional beneficiaries.

Coe and properties are surging, but all the monies are borrowed from the banks.

Sorry. But that's where you are wrong. Ever heard people buying lambo, ferrai and astons as second third cars need to go to the bank? It is happenning. And dun believe me but just look at the statistics. Also people are not just buying properties to stay anymore. Just looking at the facts, arent these signs of exuberance and success?

below is a report in the Today paper. i agree with anonymous. the paper must be wrong. and so is outreach and the MPs.

"DESPITE a vast array of public aid schemes on the menu, critics have long scorned that help does not always reach its desired targets, as many needy Singaporeans continue to fall through the cracks.

To patch up the social safety nets, the Northeast District has rolled out a new pilot programme to identify residents in need and to point them in the right direction.

"The reality is that there are still pockets of residents who are still not forthcoming or unsure where to get help when they face financial and social problems," said Defence Minister Teo Chee Hean, as he launched a Project Reach initiative yesterday.

The outreach effort will enable the authorities to determine if there are any gaps that need to be addressed and tweak help schemes accordingly.

The first phase will involve some 1,200 homes and eventually expand to nearly 5,000 — all four-room flats or smaller — in the Northeast District. Students and grassroots leaders will distribute essential information, such as a list of helpline numbers, as well as gather information through questionnaires.

In his speech, Mr Teo, an MP for Pasir Ris-Punggol GRC, described a typical scenario that a troubled resident might face if help does not come in time.

"They then start to accumulate arrears and one of their worrying problems is power supply. However, these affected households do not approach Singapore Power for instalment plans. Instead, they ignore the many warnings, and end up using candles which may result in a fire hazard to their flat and neighbours," he warned.

The outreach will expand to include Aljunied and Tampines GRCs, and the Hougang constituency.

Mr Lakshmanan, a grassroots leader, said it was difficult to put a figure on the exact number of families that need help, let alone what kind of help.

"Most of them try very hard to make things work but fail to see that they need help. We hope to extend assistance to such families before they reach a stage where it gets too complicated to even help them," he said. - TODAY"

Poor Singaporeans? Where are they? If they exist, they are either too lazy to work or are those who sponge off society. They are the group with clutch mentality and we rather they get out and stay out.

The majority of Singaporeans are rich and well taken care of. I know this to be true, why?? Because MM says so.

In every society there are bound to be some unfortunate ones that live on the fringe and need help. And it is the same here. But to put it across as a larger share of the population getting poorer in an improving economy, or to harp on poverty as if it is a common or social thing in our country, that are different issues.

I totally agree with anon 2,31. Redbean's blog should be named "doom and gloom". He brings out one hard luck case and he makes it sounds like it is a common occurence.

Singapore is in an upswing, people are rolling in money. People are going on more expensive holidays. FB outlets are packed and all are happy. Let us celebrate our good fortune and ignore those who says otherwise.

Poor Singaporeans? Where are they? If they exist, they are either too lazy to work or are those who sponge off society. They are the group with clutch mentality and we rather they get out and stay out.

Seriously, I know of people with proper masters degrees who prefer to stay at home, for years, instead of taking on just any jobs. Outside HDB viod decks, I see groups of able bodied men loitering, sitting, resting and passing their time aimlessly, in the day as well as night. Got no idea why they are not working.

Are they lazy, spoilt? By giving handouts generously, wouldnt we be sending the wrong message to the wrong people? I mean would it encourage more people to hang around?

Yes, any "govt program" to "solve social problems" will fail in the long run because ALL of them work against natural economic law — namely — that no govt can ever "make people rich" or deliver any "value" which is required for human life.

People who believe in myths should be allowed to savour the consequences of their decisions. We all have to live with our decisions, and we are free to decide for ourselves because no one is responsible for an individual's life except that individual who owns his own life.

I would concern myself with this — CPF is a TAX, masquerading as "social insurance". It has been proven time and time again that CPF alone will not be sufficient for retirement.

But, everyone has 40-50 years of productivity to get their shit together. To the people who have failed to "make it" economically for their retirement, there is one question which begs asking:

P.S. Save your "compassion" for those who have struggled to make something of their lives, the price they paid to be responsible parents and spouses, fully focusing on bettering themselves and ensuring that their families and loved ones were secure.

At the risk of seeming "unkind" to some of you cry-baby liberal do-godders:

Whether one loses or wins in life is purely up to the individual to choose. If you check carefully, ALL LOSERS have really bad attitudes.

Fuck them. They earned their lot. Let them "enjoy" what they created, just as the winners do.

This is reality & happened in our heartlander, if u ready open your eye seriously observed what is happenning but only leaders pretend sg ppl are all taking care with wealth, b'cos they hided themselve in luxury castle. in their eye stamped with $$$$.....But indeed a lot of rich millionair indo. chineses & indians came over to buy those high end properties so now sg in filled with wealthy ppl therefore where poor fellow for them to see...

thanks for your comment and welcome to the blog. this is actually what i am trying to say. many people cannot afford to plan for their retirement. i will simply say that anyone earning less than $3k a mth with have nothing left to plan for. his only saving is in the cpf. but there is hardly any left after knocking off the purchase of a flat.

and taking $3k as a guide, probably 50% of singaporeans will not be able to bother about their retirement. it is living day by day. thus the work till you die is the only logical option.

Redbean, the problem is that you are still clinging hopelessly to the old-age romantic notions of a country having to take care of its citizens. That age has passed you by, in case you have not noticed. It's the age of every man or woman for him or herself. Holding the status of a citizen in a country means nothing if you do not have the ability to contribute to fattening the coffers of the nation. Non-citizens who have the ability to do that will instead be welcomed, and accorded privileges not available to the untalented citizen. That is the way it works today, whether you like it or not.

The rich really have no need to plan for retirement, they can retire in comfort whatever happens.

It is a contradiction to say that as a lower income worker you need to save for old age, but then if they are living day by day, how are they expected to save. In such a situation, I think it is only right for the Government to help.

The Government welcomes non-citizens because there is no need for them to worry about these people when they are old, not to mention that non-citizens also do not bother the PAP every time an election comes around.

Anonymous has made some interesting points abt the perception problem..

The migrant thing is inevitable in a globalised economy and everyone realised that the same brain drain and aggressive wooing of talents and the rich are also happening in the other competitive economies. But the argument is while the poor and those living on the fringe in those other societies appeared to be much better taken care of by the state, the notion of charity first begins at home did not seemed to be taking place here as much as everyone would like; True or not, the perception is that at the same time we talk abt million dollars home and salaries, we are also shutting our eyes to the underprivileged, ignoring and wishing them away?

Our govt line has been that they have done enough to address their needs, not to lure our society into having a clutch mentality. And the wealthy just minded their business and looked the other way..

Never have I once alluded to the idea that a country should be run like a corporation. In fact, I am totally against that idea because that leads straight down to FASCISM.

You make a statement that not everyone is "talented" or "diligent". Strike out the word "talent" and replace it with ABILITY.

We come into this world tabula rasa — a clean slate. In order to survive and prevail as ADULTS, we need to learn whatever ABILITIES we need to sustain our lives. No one is immune from this, we all have to do it.

"diligence" and "lazyness" are CHOICES. People must ACT, there is no such thing as "not acting", and thus have to make choices with regard to their actions.

Whether or not "the needy" should be helped is not a matter for the state to decide, but for individual choice and action. If the state decides to help it must STEAL property from the productive to re-distribute to "the needy". This is the same as saying "it is ok to steal if you are poor".

Therefore the only MORAL way is to allow individuals to engage in act of private charity toward their fellow-man. The individuals decide if someone is worth "helping" or "saving", and that's that.

By sticking to this principle of VOLUNTARY CHARITY, the culture overtime evolves into one with a solid, moral work ethic based on OBJECTIVITY rather than misplaced emotions like "compassion" and "altruism".

We'd lived in an increasingly modernising world, and have done so as a species for nearly 100 years.

There is simply NO EXCUSE for failing at life, give the fact that everyone has chances to BETTER THEMSELVES right through their adult life. Those who simply can't do it due to severe (and it must be extreme and severe) mental or physical incapacities can be (not "will be") helped by voluntary and voluntary aid only.

If you look at Stephen Hawking, you will understand that a lot is possible in this day and age, even if one is severely handicapped.

Everyone has to, by whatever means he can muster, pay for his own way in life. A move toward more of a welfare state is a sure recipe for the eventual collapse of the country into an economic and socail basket case.

There simply is NO SUBSTITUTE for personal responsibility and accountability.

Had we remained a traditional economy like most countries instead of opening it up the way we did to global competition that has affected the lowest strata of our society the most, yes you are right. Given the rapidness of our transformation, the biggest beneficiary ie the government therefore has an obligation to mitigate the circumstances of these dislocated victims beyond pathetic $1 increases

matilah, i can understand your position, i can appreciate it as well, and i agree with them too.

a welfare state is the path to doom, that's for sure. but a brutally pragmatic state is also a recipe to doom. i have seen many bright children and people. i have also experienced many who are just not so bright and able. this is a position that i take, all men are not equal biologically or mentally.

not that the more able must help the less able. it is not a right. but as a country, you just cannot let them die or become so desperate. riots will break out when the number of those facing a bleak future gets too big. and a little charity from spare cash is not a bad thing.

but the obviously lazy, if they can be identified, must be made to work. i agree.

to anonymous,not that anyone got a better answer to this globalisation and the sidelining of some singaporeans. the right balance is the job of the political leaders. they do it well, they deserve the pat. they mess it up, they deserve the spat.

what is well or not well, only the affected people will know. those who are benefitting from this land of opportunities will be very grateful to the system. those who did not benefit or benefit not enough will be unhappy.

Hi, I am still confuse, why must we relate poor Singaporean with laziness, haven’t you seen old people around, collecting old cans and card boxes for a living? Or part time taxi driver, who have a day job, working at night in order to maintain a living for the family. They are hard working, yet they are poor. Try to open up your eyes see, observed. Then you will find something different from the implanted ideas of Rich and Wealth Singaporeans.

Secondly, how many of those “Rich Singaporean” is not born here, but got a citizenship in Singapore because they are rich?

Thirdly, yes employment has went up, but how many jobs goes to the unemployed graduate or job hoppers, and even it’s goes to graduate, have you thought of how many really goes to those who are low educated, middle class, out of job, Singaporean?And for those who are lucky enough to get employed graduate, how many are even above $2000 basic.Please think about it.

in such discussions there is a tendency to generalise. that is something which i cannot fully agree with matilah whose position is that of survival of the fittest. my view is that many are not so fortunate to be well endowed or gifted. some are genuinely slow.

and you got a point to say that many ah peks and ah mas are working like a bull or a cow eking a living. and they never say die. no matter how hard they work, their abilities are just limited by circumstances and the draw of the lot.

there is always a whole spectrum of the bad and the good, the happy and the unhappy.

[Anonymous said... Hi Redbean, I have to agree with you. With the current CPF saving, it will never be enough. That why people is leaving Singapore if they have the chance. To stay and work oversea. May 14, 2007 1:04 PM Anonymous said... And for the people out there, who think we are well, please think again, as there is people who cannot even afford to go online for this discussion. And it's making up a bigger share of the population. May 14, 2007 1:08 PM ]

Well we are trained to be "survival of the fittest" in Singapore. In our education system, as well as our way of life in Singapore. So I don't blame those who are brought up this way, just feeling sad that the whole picture is not seen.

redbean is still a statist, and no wonder the power of the stat continues to grow, because redbean and people like him COMPROMISE.

riots will break out when the number of those facing a bleak future gets too big.

No look at the economic myths, fallacies and lack of understanding:

the "needy" will always be a MINORITY in a free market country with a bustling economy. The ONLY way you are going to get the large number is if the govt interferes with the economy so much that it turns into another North Korea.

> you just cannot let them die or become so desperate.

I have no obligation whatsoever to help them or anyone for that matter.

Does being "poor" automatically give them a claim on my person or life?

Of course not.

My question is: if you think it is so important to "help" such people, why aren't you doing it YOURSELF, why do you have to ASK ME to help?

Huh?

> and a little charity from spare cash is not a bad thing. <

Nonsense. That depends. You can't keep throwing money at a person who obviously cannot manage money. Maybe he has habits you don't condone: gambling, excessive drinking, drug use — would you still give this loser money?

> but the obviously lazy, if they can be identified, must be made to work. i agree.<

Nonsense. I never said that they MUST BE MADE to work. I said they had to work just like everyone else, but NO ONE forces you or me to work. We choose to.

The point is that these folks need to BE LEFT ALONE, especially by The State and the ONLY assistance that is MORALLY RESPONSIBLE is through the benevolence of people acting voluntarily.

There is no "half way" compromise on this — no "semi" welfare state, in reality... which is where S'pore is at the moment with public schools, public health, public transport etc.

BUT AT LEAST (give credit where credit is due) the govt is privatising these institutions and opening them up to the free market — ok it is slow, not as fast as some of the new European countries BUT at least the govt is consistent about it.

The RICHER you allow people to be by PRIVATISING the public institutions, the MORE MONEY they will have to engage in VOLUNTARY acts of charity.

Last point (the point no one wants to talk about):

Not everyone can be, or should be helped. Many people in dire straits have "made their bed" — not overnight mind you, but over the entire course of their lives. (Think about this seriously if you do not want to be poor)

How do we "become"? Simple answer is whatever consistent actions we take, sometimes they are called "habits".

In violate axiom: MAN ACTS (Humans cannot "not act", because by doing so they have acted)

Therefore there are some folks who cannot be helped, regardless of how much "help" and "resources" you throw at them. Those who habitually squander, shouldn't be helped at all — UNLESS they affirm that they will change their actions.

How do I know this? I used to work in drug rehab (one of the more famous PRIVATE community-based help organizations — they are so good, govts, including foreign govts comes to them for "ideas"). You can't change anyone, it is impossible. They have to want to change first, and only THEN can you help them.

Private charities, an idea which I support fully, is more effective and JUST than govt welfare handouts.

Welfare, like any good is a SCARCE good, and therefore like any scarce good the most efficient conduit for its production and distribution is the FREE MARKET — i.e. individuals acting freely and voluntarily to derive some sort of (psychic) profit from "helping their fellow man in need".

Any other way of "helping the needy" is altruism under a cloak of VIOLENCE — the govt, or "democracy" or "society" hold a GUN to the head of the individual and relieves him of his cash..."to help the poor".

Since when has theft or robbery or threatening peaceful productive people with violence been the ethical and morally "right" thing to do?

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